tv Taking Stock With Pimm Fox Bloomberg April 11, 2014 5:00pm-6:01pm EDT
>> this is taking stock. i am pimm fox. are theme is things that striking. striking headlines coming up. the heartt bug called bleed. we have details. plus herbalife is the target of a federal bureau of investigation probe. we will discuss those headlines in a moment. and, the striking vikings. live on the set, i will have a
striking $25 million diamond set to go off at auction. let's get headlines from my cohost, carol massar. mentioned, the story after the closing bell is herbalife. is accused of being a pyramid scheme, and is said to be probed by the fbi. herbalife says they have no knowledge of any investigation by the fbi. the stock falling sharply on the news. >> thank you. we will talk more about herbalife in a moment. the national security agency, the nsa, new about the internet heartbleed bug. instead of telling anybody, they used the flaw in internet security to gather intelligence. beenn robertson has following the story.
he joins us. we have cory johnson. i want to begin with you. what does the nsa have to do with this bug?
>> the story that bloomberg broke today indicates that the nsa has not only known about the bug for two years since it was introduced, but it has exploited it for two years to steal information on internet users. this revelation comes in a week where internet companies are scrambled to upgrade their infrastructure to protect against these attacks. there is a lot of animosity about the nsa and the fact that they know about this security bug and kept it themselves. >> what has been the response from lawmakers and from the nsa? hasn't commented on the story. this has generated a lot of interest. the nsa did have a
lot of friends to begin with in terms of internet companies. this adds another dimension to the problem. this is a major security bug. this is the thing the industry has scrambled to fix. their exploitation does not sit well with a lot of folks. >> cory johnson. can yous this -- have explain what this bug is? i've are received -- i have already received e-mails to change my passwords. >> we have a statement. the nsa denies they know about this until it was made in private sector reports. the national security council saying the nsa or other parts of the government were aware of the one ability before 2014 of april is wrong. it.nsa denying
bloomberg news sticking with the story. we will keep digging into that. >> what is this
bug? what the bug would allow a user to do is a whole -- is a hole. when there is a connection between two servers, there is a painting to make sure the user and server is still there. a heartbeat back and forth. maliciousa way for a intent to get inside of the heartbeat and access the computer accessing the server. sending information, or taking it back and forth. passwords, or things that are in the user's memory. that is how this works. it has been identified that fixes are on the way. , make itarticular bug clear. it is not something that was
created by the government. but the story maintains that the government knew about it. where does the bug come from? >> that is right. the story that we have is that it came from a programmer who says he made an innocent mistake. the idea the nsa created it would be a salacious thing. the programmer made an innocent mistake. one of the advantages is that everybody has their eyes on these programs and can fix them quickly. the problem is the intelligent services who can also see the code, if they spot an error and exploit it and don't tell me buddy, i can create a lot of security risks. and don't tell anybody, it can create a lot of security risks. >> is this retail shopping data? what is at stake? >> anything stored on your computer. anything you access over a secure internet connection. aching information, usernames
and passwords. all of the things of bunnies use -- all of these things that companies protect. any of that information could be compromised. it is worth noting almost all of the large internet companies have patched their systems. most of the large banks were not affected by this. for most consumers they should feel secure using the internet. there are still a lot of holes to plug with this bug. now, most of the large services people knowing use have fixed the problem. >> it seems as though the government may or may not have known about this pre-private industry knows about it. security experts know about it.
the public doesn't. >> the public is learning about it quickly. the disconcerting thing about this story, the nsa has denied this, but bloomberg is sticking with it. job of the nsa?
who are they protecting us from? are they willing to let our wallets get stolen to keep us safe from terrorists? that is the disconcerting thing about this story. as a sort of the denials and the facts of the story. a step back from the nsa role in all
of this. industry, why haven't they come out previously and said we knew about this. we took care of it. everything is safe. >> private industry found out about it just a monday. you raise an interesting point about private industry's role. open source software is created by volunteers for the most part. corporations that benefit from taking this software, there is a big push for them to contribute more financially so these types of owner abilities can be
discovered. we don't have any evidence that anybody outside of the nsa knew about this. the nsa is denying that. as far as we knew, everybody learned about this on monday. there's been a push for private industries to contribute more to this open-source community that gives them so much. >> thank you for giving us your thoughts on this. i want to thank jordan roberts and cory johnson. joining us from san francisco. another striking headline coming out has to do with the house energy and commerce committee. we have released new documents that reveal more missteps in the general motors recall the came 10 years too late. yang yang joins us with the details. what are these documents, how bad do they make gm look question or >> pretty bad. we have 64 documents and hundreds of pages released by the energy and commerce committee. it is one of many releases come.
chairman fred upton said in a statement of these initial documents revealed failures within the system. not one of these documents is an e-mail that could be damaging, where it shows that the ceo was told of problems in 2011 when she was senior vice president of global products. it could be damning because gm says that it was in no way contradicting her testimony preachy testified to congress where she swore under oath she didn't learn of the ignition switch problem until after she became ceo in january. gm is maintaining that power steering and ignition switch problems are not related. we know that she knew of some goblems, even if it doesn't to the faulty ignition switch. some skeptics say if the car turns off and the power steering turns off, those could be
related. other documents show exchanges georgio. raymond de he calls the problem impossible to modify. he said he saw no issues with the airbag. he signed off on parts that did not solve the problem. in 2012 he suggested they only make the switch on vehicles rot dealerships -- brought into dealerships who saw problems themselves. that would be $150 per switch. should they switch all of the model years for the chevy cobalt, that could have been $10. they are fighting over something as small as $10 that went to the deaths of 13 people. they take away from this is that gm was slow to communicate. slow to act. there is still much left to examine. he will continue to follow the fax.
thate ignition switch we're talking about, this is something that was damaged because if you had keys on it, eventually a war out and became broken? being described as one of the leading causes of the problem. the problem where if there was too much weight on the ignition switch it would pull the car into the off position. because of that, we are seeing that possibly the ceo did perhaps no big problem. she is saying that the power steering is unrelated. effect the matter is -- the fact of the matter is there was a problem, they knew about it for years. it is a matter of seeing how they're going about his all thing this pre-that is the big question we will be waiting to find answers to. >> thanks. coming up next, we will have one
>> a report late today that the federal bureau of investigation is said to be investigating the actresses of herbal life. the news sent the stock plunging. more than 14%. herbalife says it has no knowledge of the ongoing investigation by the fbi. -- say they manager billd ackman spoke about his position on herbalife. the business progress in
herbalife is telling the story with regulators, making sure they understand what the issues are. >> joining me now is stephanie ruhle. you does the latest tell the investigation? >> this is extraordinary. if you think about this, bill ackman came out a year and a half ago. december 21, calling this company corrupt. it wasn't just he was shorting it for his own fund. he was shorting it for the better of america. he thought the company was doing wrong by people all over the world. since then it seems that every hedge fund manager was on the other side of the trade. finally, it is started to go his way. as you mentioned, an investigation from the fbi in conjunction with the department of justice about the business dealing of herbalife stock is
down 14% on the day. do you realize who the holders are on the other side? fidelity. capital. this is his biggest investment he has ever made. it is an extraordinary tale. >> it is a tale of both bulls and bears. probeoes this potential of herbalife maine to the actual company operation? >> it could be terrible. it is too soon to tell. mullis.any, ken has scheduled the ipo next wednesday. i reached out to ken mullis and got no comment from the company. should hold up his ipo. you are scheduled to ipo in days away.
it could hold that up. lex is their confirmation from the federal bureau of investigation? how could they go to the next app? would they announce a probe? >> it is unclear. so far all we have is that there is some sort of investigation going on. this is what bill ackman has been waiting on. many who have said he was crazy to do this, it has been regulatory short, you are waiting on the u.s. government to take action. finally it is. mullis and herbalife had spoken proactively, and said you are crazy to be in bed with him on this. now the tables are turning. the one analyst covering left davidson months ago to work for one of the largest holders. >> as part of this ongoing
battle between bill ackman and other investors, is there any indication that the company's performance has been slagging? >> not necessarily. everything is saying is fraudulent. it is tough to say, is the company showing signs of weakness? yet to show their sales numbers. that is what he has been asking for for months. it is anonymous distributors who don't have to share numbers of their selling arise. to say how the company does, we have never known how they have done because they have been behaving illegally. >> carl icahn is supposed to be a smart guy. >> 17 million shares. >> a smart investor. you think he knows less or more than bill happen? >> it is funny. bill will say he knows more
about the company that anyone. many investors who bid on the other side, it is in a hedge fund showdown. a war of egos. george soros, stan loeb. bill would say he has been the one who is in all his word. carl icahn would disagree. to say this is a soap opera would be a great understatement. it has been an extraordinary tale for a year-and-a-half. i pushed him on this. he said, just wait. >> we will turn to you for continuing coverage. thank you. coming up, more detail about how a direct selling model works. sells chief executive who projects.s ♪
>> striking headlines and herbalife today, it might be the best time for my next guest. using a direct selling business model in a different way. good to have you with us. we were talking about herbalife with stephanie ruhle because of this report. there is an fbi investigation. but, there are different types of direct selling models. direct -- vis a salus is a direct shipping model. we just launched our fastest product, crunch, a serial i designed with my son.
>> why did your son need a special serial? >> he has autism. children have sensory related issues. he is underweight unfortunately. i taste tested the serial. he likes it. it passed his test. what about the business itself? you have gone, you have written a book. a gang member as a young man. now running a major business. >> when i was 13 years old, i lost my father. my family was disrupted her to -- my family was disrupted due to drug addiction. i could be a doctor. it could be a lawyer. i had poor grades. i suffer from disabilities. entrepreneurship came naturally to me. >> how did you decide the health industry was where he wanted to be? lex i was a technology
executive. i struggled with my health. i got up to 260 pounds. error, irial and realized there was a gap in the consumer awareness of health. >> people are going to be more aware of your store because there is a documentary. >> i just released documentary in conjunction with autism awareness month of april to support families in need of different causes that focus on autism. it is called nothing to lose. >> people can check that out. >> it was released this week. it is free of charge. >> thank you for spending time of us. ryan blair. have you got a great idea for an app that will make you a lot of money? i will introduce you to someone you want to meet. into a reality.
>> this is taking stock on bloomberg. i am pimm fox. for a look at the market moving headlines, i want to go to carol massar. >> one big headline at this hour. herbalife is the big headline or for today. the company that bill ackman has accused of being a pyramid scheme is said to be part of an investigation by the fbi. this is according to a person familiar with the matter. herbalife says it has no knowledge of an fbi investigation.
that is our big headline. >> thank you. have you ever had a great business idea? it has to be a new app that everyone is going to want. but you know have the technological expertise to see it through to completion. -- kuty, thank you for being here. what is clevertech? how do you describe it to people who are not clever, not technologically advanced? product a digital development agency. what we do is help entrepreneurs ring their ideas to life. >> what is an example? >> for example, if you look at our most exciting clients, domino.com. they were founded by the huma.der of humor --
we started with them at the beginning. we created a minimal viable product. we delivered in 30 days. >> what is a minimal viable product? >> when you examine an idea and you want to get it out to the marketplace, you want to wantate, make sure people what you are thinking about, develop just enough that people will be interested. >> what was it for domino? >> domino was about home decor. they wanted to create a pin board suitable could take different images and put it on the pin board and share with their friends. >> is this an expensive process? >> i can give you an example. we have a customer.
they had nothing. they had to borrow from their friends, family. they spent about $50,000 and we created an m.v.p. for them in 60 days. nast is one of the companies you have connection with. >> domino.com, they went through a series a, and a series b. they are reimagining the future of magazines. >> the same thing with viacom. they come to you, or what happens? a third-party comes in and says i have a great idea of how i can work better.g i want someone to build this to show to people. >> entrepreneurs love ideas. there are some a people who have ideas a wanted test. lex ideas can be expensive to test. how much would something like
this cost you? and m.v.p.. a minimal viable product. if you had something that i want , what would something like that cost? >> we always look to find ways to validate that the idea has legs. you can create a space shuttle in 30 days. you can try to find an idea that is going to be just enough that we can put out a website. >> thousands of dollars, hundreds of thousands? what should someone understand they have to have two see it through the first step. >> pin booster had $50,000. you need some capital in order to drive. >> you mentioned the idea of putting something into the market. can you expand on that? it is great to have an idea. adoption is key to the . >> we use lean startup
principles. but we're trying to accomplish is having just enough so we can examine the idea and find out if there is enough people who are signing up who have the need that you think they do. >> what qualifies as enough? you can download a specific app and you are always reading the reviews that other people have written. you see how many stars there are. i thousand users, 10,000? what is a great group of numbers? like that is one of the things we talk about. measures of success. had you define success for your industry? clue.ave a good -- it could person be one person. sometimes you are looking for thousands of viral customers that are recommending it to someone else. it is not just a number. it is what they do with it. >> keep us in touch with some of the campaigns and the mvps you are creating.
billiards hall of famer. i have the chance to sit down and speak with her. stumbled into a pool room one day. i had a crush on my brother's best friend. >> this is in sweden? >> this is in sweden. a two-hour drive north of stockholm. >> someone played pool. >> they just hung out. , playing all athletic soccer and hockey. so did i. when i walked in they had a beautiful pool room. if not the nicest one in sweden. tables in there. perfect lighting. i went well, this is cool.
never heard of in my life before. i played a couple of times it became instantly obsessed. time iafter the second played, this is what i want to do. >> just to understand, you're a champion. you have won the women's professional billiard association championship. you have traveled all over the world doing this. did you ever think that you would be the queen of pool? your nickname is the striking viking. >> the sweetest thing. be a star set out to or someone who changes the game, or a legend. you play because you love it. ,hen, all this other stuff winning championships, getting inducted into the hall of fame, making a change in the sport comes as you are doing what you already love to do. >> what is the sport of full?
tell us about the individual games and scoring. how can people learn more question my >> you have three different major games. a very old game, derived from the same background as golf. u.k. played in the non you have a table with pockets. you play with two white balls and a red ball. it is different. then you have only play in the united states where you go to the regular standard nine foot tournament table. it is something you would find in somebody's home. this is eightball or nine ball. strategy thate goes on in your head. i understand it is physics on the table. but to a certain point this is about thinking one shot, many
shots ahead. >> it is like the game of chess in a sense. you play ahead. usually, it is an open table, i will think to balls ahead. have to adjust if you get out of line and come up with a plan b. you really do think ahead. >> is one of the ways you do that by trying to introduce the sport of pool to as many people as possible, particularly outside of the united states or europe? asia is a big area were pool is getting popular, particularly among young women. >> it is going crazy over there. it has always been an important part of my life. when i played pool in sweden, nobody said i can't believe you are playing. what kind of nice girl like you plays a sport like this. like there was no reference to the hustler movie or jackie
gleason, or paul newman. >> not at all. i can't believe it you're playing pool, and i had my daughter young, the other parents would go on. it would drive me crazy. it is the most beautiful game there is. i could understand, what is everybody think everyone is a minnesota fast type? that was strange. one of the things i set out to do was change that image. it is always been the image that brunswick has had. when they asked me to represent them, -- >> you are the only player who represented. >> 1988. that was on my life changed. to actually doing this for a living. they gave me the luxury of having the plateau. and became the president of the women's professional billiards
association. from there, i was able to secure the contract with sponsors within the industry, getting a contract with espn. >> explain also that there was a situation in which the cause you retain the rights to the video of the championship outside of the united states, that is a big was able to let you build a business. >> exactly. we sold the rights to europe to read it was shown a lot over there. the popularity has gone up with women. it is amazing how popular. >> when you think of pool now,
what would you like to see happen in the next five years? >> the thing that is close to my heart is people having a table in their home. my kids, my daughter, instead of just sitting in front of the television, playing the greatest family game. there is no better way to get together. that has become interesting. brunswick game on is a website where you can learn about the game. i have a lot of videos to show how you can teach kids. >> is there something about the green? do you recall throughout your career, the green itself creates some feeling? >> there is a piece there.
a lot of times we use blue now because it shows a better on television. to me, this is what a pool table should look like. that warm green color. it puts you in that place. that is one of those things i thought was sexy when i walked into the pool hall in my hometown. a dark room with these lights over the table. it is staged. that is part of what hooked me. let her get away without showing me some of the skills that have made her the best in the world. after we spoke, we had a pool party. ♪ >> the main thing is, when you
add, this arm is straight up and down. want to have to adjust it. to people, don't hold the queue. cradle the queue. does ale -- the cue lthll the work. anywhere from here to here is the best to break the balls from. you want to have a push. it doesn't matter if you hit it superhard. get a straight hit. in trick shot, the set up is important. having someone show you how to shoot.
kadakia. >> thank you. we had a 14 karat orange diamond. for $35last november million. that has brought us more collectors. we have more special stones. we have something special, how about offering them for sale. >> let's start off with the blue diamond. this is something you may not think about. a diamond being blue. >> they form less than two percent of world diamond production. the blue is caused by the elements of minerals they go in the stone. to have a stone that is 13 , nots, flawless imperfections, and to put it in layman's terms, this is the rolls-royce of blue diamonds.
comparable anything to this impeller that exists? >> for something that is as dark but not as pure in color, the hope diamond. that is not for sale. if you want a blue diamond, come to christie's. >> he have to go to geneva. >> or call into geneva. you can be on the phone. >> the same thing for the white stone that looks like a diamond. raja diamond. it was purchased in the 1800s by mr. morgan. towards 1880, tiffany purchased the diamond and sold it to is a isabella stewart gardner. christie's sold it for the first time for $2 million. it is back with us now and is going to be make more than $5
million. a way to determine what is going to be the fashion? we know about color diamonds. >> people have realized how much rarer they got, how rare are defined in large sizes. this education the market like we have seen the good temporary art market that has driven prices to a new level. >> let's talk about a pink diamond. this is one that is available. people can go and see it in new york because it is going to be auctioned off. >> that is right. you can see all of them. exhibition. everybody is welcome. the pink is a harry went and i'm in. a very strong color. what is great about this diamonds, it is being offered by a nice couple. proceeds from the sale of the diamond will go to
animal welfare. a good cause. >> what kind of demand you expect to be sustained? after these auctions, is there going to be another way? this seems like the second big wave we have had. >> it has been going on. at the end of 2011, when we had the sale of the elizabeth taylor collection him a christie's jewelry totaled $605 million worldwide. when are we ever going to do this again? last year, when i saw the yellow diamond, that was 20 years in a row that christie's has been going on the up. when is the market going to stop? i don't know. >> we can enjoy all of these diamonds. thank you very much. american and switzerland head of jewelry. thank you for taking stock. coming up, "bloomberg west."
>> live from pier 3 in san francisco, welcome to "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i'm emily chang. our focus is on innovation, technology, and the future of business. let's get straight to the rundown. >> the nsa may have known about heartbleed virus for years. we will look at whether the selloff will give some company second thoughts about going public. first, a check of your top headlines.